Sir Roger Douglas stepped into New Zealand’s finance portfolio in 1984 as a part of the fourth Labour government took power facing national bankruptcy.
More than 40 years after introducing the sweeping market reforms known as Rogernomics, the former minister reflected on the transformation during an interview with 1News Simon Mercep for Newsmakers Revisited.
“New Zealand was headed for bankruptcy, and there was a need to do something about that urgently,” Douglas told 1News.
“We got elected, and on the Monday that change started to come about.”
The resulting economic overhaul saw the New Zealand dollar floated, markets deregulated, state assets sold, and tight government controls stripped away. Douglas told 1News he remains most proud that the core policies survived four decades.
Among those enduring shifts was the launch of the Goods and Services Tax in 1986 at a flat rate of 10%. The levy added costs to everyday items like milk, bread, fresh fruit, vegetables, and clothing.
At the same time, existing sales charges vanished from major purchases including televisions and refrigerators. Douglas defended the mechanism, arguing it allowed governments to reduce personal income taxes and eliminate other levies.
“It’s a good tax basically in the sense that it taxes people when they spend their disposable income,” Douglas told 1News.
The rapid pace of change disrupted major industries and cost workers their jobs, breeding severe internal tensions within the Labour administration. Those clashes ended when then-Prime Minister David Lange sacked Douglas as finance minister in 1988.
Asked if he completely transformed New Zealand into a free economy, Douglas told 1News, “Well, not completely, because Lange wouldn’t let me finish the job.”
“But I think in a lot of areas we opened the economy in a way that people were able to use their skills, their initiative, where they hadn’t been allowed to. We only went halfway though.”
Douglas subsequently helped establish the ACT Party in 1994 to continue pushing for market changes outside the Labour fold. “The question was to try and help New Zealand,” he told 1News. “The party frankly for me has always come second.”
Reflecting on four decades of debate, Douglas indicated he remains unsatisfied with past achievements. “I’d definitely like to do more,” Douglas told 1News. “Because frankly there’s a lot to be done.”
“I’m not someone who dwells in the past. I would like to change the future.”
